Distressed borrowers who’ve shuttered their businesses because of
the coronavirus pandemic are flocking to take advantage of the stimulus
package the Small Business Administration has designed known as the
CARES Act – Coronavirus Aid, Relief and Economic Stimulus Act, meant to
help millions of small and midsize businesses through SBA 7(a) loans.
The SBA is expected to look to the private sector for help in processing these loans because it will not have the capacity to service the high demand, according to Chris Hurn, CEO and founder of Fountainhead, one of only 14 nonbank lenders licensed to make SBA 7(a) loans.
Fountainhead is able to approve loans within a few hours, whereas the SBA typically takes about three to four weeks just for the initial approval, according to Hurn. “The SBA does not have the infrastructure to process the number of loans they are promising to distribute. In order to get the economy back on its feet, they will have to lean into the private sector, specifically to non-bank direct lenders,” Hurn said.
The CARES Act will enact the Paycheck Protection Program, allowing the government to set aside $350 billion to help businesses that are continuing to pay their employees and help them navigate the current economic landscape.
Small businesses are very important to landlords and property owners because if small businesses can’t pay rent, it activates a ripple effect in the industry. The landlords and property owners need cash flow and if their tenants cannot pay rent, they will no longer have a stream of income. “This cycle becomes more vicious as time goes on and as both the small business owner and landlord are not being paid,” Hurn said.” Fountainhead has received over 2,500 loan inquiries from small businesses across the country over the past two weeks. “People are already seeking help,” he added.
According to Hurn, the most helpful thing landlords and banks can do right now is defer payments. Landlords can defer payments on rent and banks can defer payments on any outstanding debt a small business may have. Banks, unlike landlords, can participate in the Paycheck Protection Program to help the small businesses they serve keep their employees and will be able to process the SBA 7(a) relief loans as well. Banks, however, will not be able to process loans quickly, which is why small business owners should explore the private sector, Hurn said.
https://www.globest.com/2020/03/31/small-business-administration-leans-into-private-sector-for-influx-of-distressed-borrowers
The SBA is expected to look to the private sector for help in processing these loans because it will not have the capacity to service the high demand, according to Chris Hurn, CEO and founder of Fountainhead, one of only 14 nonbank lenders licensed to make SBA 7(a) loans.
Fountainhead is able to approve loans within a few hours, whereas the SBA typically takes about three to four weeks just for the initial approval, according to Hurn. “The SBA does not have the infrastructure to process the number of loans they are promising to distribute. In order to get the economy back on its feet, they will have to lean into the private sector, specifically to non-bank direct lenders,” Hurn said.
The CARES Act will enact the Paycheck Protection Program, allowing the government to set aside $350 billion to help businesses that are continuing to pay their employees and help them navigate the current economic landscape.
Small businesses are very important to landlords and property owners because if small businesses can’t pay rent, it activates a ripple effect in the industry. The landlords and property owners need cash flow and if their tenants cannot pay rent, they will no longer have a stream of income. “This cycle becomes more vicious as time goes on and as both the small business owner and landlord are not being paid,” Hurn said.” Fountainhead has received over 2,500 loan inquiries from small businesses across the country over the past two weeks. “People are already seeking help,” he added.
According to Hurn, the most helpful thing landlords and banks can do right now is defer payments. Landlords can defer payments on rent and banks can defer payments on any outstanding debt a small business may have. Banks, unlike landlords, can participate in the Paycheck Protection Program to help the small businesses they serve keep their employees and will be able to process the SBA 7(a) relief loans as well. Banks, however, will not be able to process loans quickly, which is why small business owners should explore the private sector, Hurn said.
https://www.globest.com/2020/03/31/small-business-administration-leans-into-private-sector-for-influx-of-distressed-borrowers
No comments:
Post a Comment